The Board of Directors received the Final Investment Decision for the New Generation gas gathering project, which will initially provide 1.7 Bcf/d of capacity from the Haynesville Shale to the developing Gulf Coast and LNG markets.
Two major acquisitions were recently closed:
Midcoast Energy’s East Texas operation (“Midcoast ETX”), an extensive gathering and transmission system with 1.5 Bcf/d of current volume and 1.0 Bcf/d of existing delivery capability to the Gulf Coast and LNG markets.
Align Midstream, which owns several gathering systems adjacent to the Midcoast with current volumes of 600 MMcf/d;
HOUSTON, September 22, 2022–(BUSINESS WIRE)–M6 Midstream (“Momentum” or “the Company”) today announced the Final Investment Decision (“FID”) for its new natural gas gathering and carbon capture project, New Generation Gas Gathering (” NG3″), which will gather natural gas produced in the Haynesville shale for re-delivery to top Gulf Coast markets, including LNG export. In addition, the Company completed the acquisitions of Midcoast Energy’s East Texas business (“Midcoast ETX”) from an affiliate of ArcLight Capital Partners, LLC and Align Midstream from Tailwater Capital to gain a leading presence in the Haynesville Shale.
With the final investment decision, the natural gas gathering and carbon capture project will have an initial capacity of 1.7 Bcf/d and can be expanded to 2.2 Bcf/d and will also capture and permanently sequester up to 2.0 million tons CO2 per year. The project is expected to start operations in the second half of 2024.
“With significant long-term volume commitments from several leading Haynesville shale producers, including Chesapeake Energy, we are pleased to reach a positive FID for our new gathering and processing project, which, combined with our existing capacity in the Midcoast system , will serve to address bottlenecks in the Haynesville Shale and provide much-needed capacity to the growing Gulf Coast LNG markets,” said Frank Tsuru, CEO of Momentum. “Our customers are also excited to be participating in the first-of-its-kind clean negative gas collection project.”
Mr. Tsuru added, “Consistent with our past business practices, Chesapeake Energy’s anchor commitment for NG3 comes with an option to own 35% of the project, creating alignment between Momentum and one of the largest Haynesville Shale producers. “
With the combined assets of Midcoast ETX and Align Midstream, Momentum currently serves volumes in excess of 2.0 Bcf/d in a footprint that includes approximately 3,000 miles of gathering pipelines, 1.5 Bcf/d processing capacity, 700 MMcf/ d processing capability. 200,000 HP of compression and 820 miles of transmission pipelines delivering natural gas to the Gulf Coast markets in Southeast Texas and the Carthage and Bethel markets in East Texas. The assets serve a diverse customer base consisting of producers, utilities, end-users and LNG exporters.
“By combining the extensive footprint of the Midcoast and Align assets with NG3, Momentum is able to alleviate existing constraints in the Haynesville Shale, particularly the Shelby Trough, and enable our producer customers to reach premium Gulf Coast markets,” said Brant Baird, President of Momentum. “We also provide these Gulf Coast markets and LNG facilities with direct access to growing Haynesville shale production.”
“We have been closely associated with Momentum’s management team for more than three decades and are incredibly proud to have helped accelerate their plans to establish a leadership presence in the Haynesville shale,” said EFM Managing Partner and Founder Billy Lemmons. “EnCap Flatrock Midstream has joined several proven institutional energy investors in Yorktown Energy Partners, Martin Sustainable Resources, Ridgemont Equity Partners, Bengas Midstream Partners and Blackstone Credit to support Momentum’s Haynesville Shale development plans.”
Terms of the transactions were not disclosed.
Barclays served as Momentum’s exclusive financial advisor on the acquisition of Midcoast ETX, and Barclays, Jefferies Finance LLC, Blackstone Credit and Wells Fargo Securities, LLC arranged the acquisition financing. Jefferies LLC served as Momentum’s exclusive financial advisor on the Align acquisition, and Vinson & Elkins LLP served as Momentum’s legal advisor on both the Midcoast ETX and Align Midstream acquisitions.
Jefferies LLC and Latham & Watkins LLP advised ArcLight Capital Partners, LLC of the sale of Midcoast. Piper Sandler & Co and Locke Lord advised Tailwater Capital on the sale of Align Midstream.
Momentum is an independent midstream energy company that provides natural gas producers with flexible, responsive and reliable services to connect the well to the market. Since 2004, Momentum has developed or acquired more than 5,000 miles of pipeline, 18 processing facilities, three NGL fractionation facilities, over 1 million barrels of storage and approximately 500,000 compression horsepower. The Company’s primary objective is to build high-quality Greenfield projects and acquire natural gas assets in developing US basins that meet the emerging needs of its customers. Momentum is backed by equity commitments from EnCap Flatrock Midstream, Yorktown Energy Partners, Martin Sustainable Resources, Ridgemont Equity Partners, Bengas Midstream Partners and Blackstone Credit. For more information, visit https://www.momentummidstream.com.
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Sarah Blair Gillette